Is Our retiree Health Care Subsidy vested by implied contract? Written into the charter, carried out year over year, guidelines for full vesting spelled out, the City of Los Angeles entered into a binding contract with it’s employees on the date of hire, later replacing that vested benefit via surreptitious negotiations and questionable ratification. No like benefit was bestowed upon the membership, and the benefit was taken under duress.
California Supreme court was asked, if a county and it’s employees can form an implied contract that confers vested rights to health benefits. Here is a very short summary of that case.
RETIRED EMPLOYEES ASSOCIATION OF ORANGE COUNTY, INC.,
Plaintiff and Appellant,
COUNTY OF ORANGE,
9th Cir. No. 09-56026
C.D. Cal. No.
Defendant and Respondent.
IN THE SUPREME COURT OF CALIFORNIA
At the request of the United States Court of Appeals for the Ninth Circuit,1
we address the following abstract question: ―Whether, as a matter of California
law, a California county and its employees can form an implied contract that
confers vested rights to health benefits on retired county employees.‖ For the
reasons that follow, we conclude that a county may be bound by an implied
contract under California law if there is no legislative prohibition against such
arrangements, such as a statute or ordinance. (Youngman v. Nevada Irrigation
Dist. (1969) 70 Cal.2d 240, 246.) Although Government Code section 25300 does
require that compensation of county employees be addressed in an ordinance or
resolution, the statute does not prohibit a county from forming a contract with
implied terms, inasmuch as contractual rights may be implied from an ordinance
In response to the Ninth Circuit‘s inquiry, we conclude that, under
California law, a vested right to health benefits for retired county employees can
be implied under certain circumstances from a county ordinance or resolution.
Whether those circumstances exist in this case is beyond the scope of the question
posed to us by the Ninth Circuit.